28 April 2011

Emcore raises $9.6m in private placement of stock

Emcore Corp of Albuquerque, NM, USA, which makes components, subsystems and systems for the fiber-optic and solar power markets, has agreed to sell 4,407,603 shares of its common stock (about 4.9% of its total number of shares outstanding) to Shanghai Di Feng Investment Co Ltd in a private placement.

The transaction is expected to raise about $9.6m. The purchase price per share will be $2.19 (a discount of about 5.3%, based on a 15-day volume-weighted average price as of 25 April). Emcore did not issue any warrants or pay any broker fees or commissions in connection with the transaction. The closing of the private placement is subject to the completion of customary closing conditions for transactions of this type, including approval of applicable Chinese government agencies.

Emcore says that the shares sold in this private placement have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws, and accordingly may not be offered or sold in the USA except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. The firm has agreed to register the shares pursuant to an S-1 registration statement to be filed with the US Securities and Exchange Commission (SEC).

“This common stock private placement, combined with our line of credit with Wells Fargo and our improved operating performance, has substantially improved the company's liquidity position,” says president & CEO Dr Hong Q. Hou. “The capital raised from this transaction will allow the company to aggressively execute its business plan.”

Net proceeds will be used primarily for capital expenditures and increases in working capital necessary to support the growth in certain sectors of Emcore’s business.

See related items:

Emcore’s revenue falls 4% due to ITC parallel-optical module ruling

Emcore’s net loss slashed to $0.9m as quarterly revenue grows 16%

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